Have your emotion ever hijacked your financial decision? You can admit it boldly. Believe me, every one of us has fallen prey to emotional hijacking at some point of our lives.
However, it is important that you're able to identify those feelings, so that you can act accordingly.
1 Emotion - Anger
Effect on managing finance:
Anger can prevent you from taking necessary steps to get back on the right track with your money. Also, you'll blame yourself along with blaming your creditors/lenders for charging too much interest, due to which you're facing financial problems.
How to control this emotion:
First of all, accept your anger and look for realistic solutions. Instead of blaming yourself and others, talk to a certified financial planner and discuss how to bring your finances back on track.2 Emotion - Guilt
Effect on managing finance:
Out of guilt of getting a better ROI (Return On Investment), you may feel to spend on underprivileged people. However, while doing so, you may spend more than what you can afford.
How to control this emotion:
Have a financial plan to decide your spending even if you're well-off. It will stop you from overspending. You can think of donating a certain portion of your monthly/annual earning to a trustworthy charity. This way, you can save tax, too.3 Emotion - Anxiety
Effect on managing finance:
If you worry about money, you won't be able to take any financial risk, even if it's minimal. As a result, you'll make poor financial choices like being too conservative with your investments. So, you won't get better returns in the future.
How to control this emotion:
You can talk to a financial advisor to weigh the potential risks of investment. Also, opt for automatic payments if you're worried about forgetting to pay your bills on time.4 Emotion - Sadness
Effect on managing finance:
A sad person often withdraws himself/herself from money. He/she doesn't think about money or want to spend it. For them, money becomes a symbol of loss and they think they won't feel sad if they stop thinking about finances.
How to control this emotion:
In this situation, take help from others - it can be your trusted friend, a financial planner, your partner, etc. Also, share your grief with others to feel better and manage money efficiently.5 Emotion - Joy
Effect on managing finance:
Being happy can also trigger you to spend more. You are happy with what you have, so you don't think about tomorrow (might be, don't plan about a secure financial future) and start overspending.
How to control this emotion:
A happy state of mind will help analyze your financial condition and make decisions logically. However, be careful not to overspend and think about the pros and cons of every monetary decision you make - be it a minor decision or an important one.6 Emotion - Depression
Effect on managing finance:
A depressed person has difficulty in concentrating as well as making decisions - both of which are necessary for good financial management.
How to control this emotion:
Ton ensure that all your bills are paid on time, set up automatic payments with your creditors. You can also set up alerts to remind you regarding payments. Do not hesitate to take financial help if required.7 Emotion - Overconfidence
Effect on managing finance:
If you're overconfident, you won't notice the warning signals regarding your financial matters. For example, you may buy an expensive item with your credit card without even thinking how long it'll take to repay.
How to control this emotion:
Having a positive outlook is always welcome. However, you should think logically, too. Before swiping your card, chalk out the repayment strategy instead of thinking that you'll somehow pay back the amount.8 Emotion - Overwhelmed
Effect on managing finance:
You're confused regarding what financial decisions to make. As a result, you stop making any monetary decisions and it may make the matter worse.
How to control this emotion:
First of all, start a physical activity. It will help you clear your mental block and you can work toward achieving your goal. Learn about mutual funds, retirement accounts, etc. and gradually, you'll have better control over your money.9 Emotion - Embarrassment
Effect on managing finance:
You are embarrassed to ask your friend to split the check since he/she is offering to pay the bill in full. But, you can't offer to pay the bill in full because it may hamper your budget.
How to control this emotion:
Be honest; don't be embarrassed. A true friend will always understand that you're trying to save or your financial situation doesn't allow you to spend beyond your budget. It is better to show who you are instead of pretending what you're not.10 Emotion - Envy
Effect on managing finance:
If you want to keep up with the Joneses, you may fall into debt. There are chances that you'll end up overspending since you won't follow your budget anymore, and will try to maintain the lifestyle your .
How to control this emotion:
Use your envy for your growth opportunity by self-examining your financial situation. Let your jealousy compel you to make smarter monetary decisions, like eating at home, saving money, so that you can buy the things you desire.11 Emotion - Regret
Effect on managing finance:
Researches show that about 10% people regret about any money decisions they've made in the past. However, this attitude can prevent you from moving forward; thus, worsening your financial situation.
How to control this emotion:
Use this emotion for an opportunity to learn. If you regret, you'll come to know where you need to improve and also motivate yourself to do so. So, forgive yourself and focus on strategies to improve your monetary condition.With proper help you can
- Lower your monthly payments
- Reduce credit card interest rates
- Waive late fees
- Reduce collection calls
- Avoid bankruptcy
- Have only one monthly payment